From the microsoft.public.windows.backgroundtransfer newsgroup
Background Intelligent Transfer Service (BITS), is a Windows infrastructure component that provides Application Programming Interfaces for applications to use to request network data transfers in the background. Using BITS, an application like Windows Update Auto Update requests that a particular file be transferred from its source to the destination in the background. BITS then transfers this data on behalf of the requesting application. BITS transfers are in the background, and are resumeable i.e. when the network disconnects or the machine reboots, BITS will continue transferring from where it left off.

If you want to know more check out the following links:

BITS SDK:
http://msdn.microsoft.com/library/default.asp?url=/library/en-us/bits/bits/bits_start_page.asp?frame=true

BITS Introduction Whitepaper:
http://www.microsoft.com/windows.netserver/techinfo/overview/bits.mspx